M/S Universal Electricals (Ranjula Jain Ashok) vs. Additional Commissioner Of Central Tax (Appeals)
Original PDF →Facts
The petitioner's appeal against an Order-in-Original was rejected by the Appellate Authority because a pre-deposit amount of Rs. 1,800/-, due to a computational error, was paid beyond the 120-day period stipulated under Section 107 of the CGST Act.
Held
The High Court found the Appellate Authority's strict interpretation of the pre-deposit requirement to be pedantic and undermining the appellate remedy. It set aside the Appellate Authority's order and restored the appeal for a decision on merits.
Key Issues
Whether a minor, bona fide shortfall in pre-deposit, paid beyond the statutory period, should lead to the rejection of an appeal, and if the Appellate Authority's strict interpretation of Section 107 was appropriate.
Sections Cited
Section 74, Section 107(4), Section 107(6), Section 107(11)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER IN ORIGINAL DATED: 17.07.2023 BEARING FILE NO GEXCOM TECH GST 3878N 2022 CST RANGE D WEST DIV 1 COMMRTE BENGALURU W DIN 2023075YU0000222CA4 AND OIO NO 18 2023-24 (ANNESURE D). III) ISSUE A WRIT OF CERTIORARI QUASHING THE SUMMARY OF THE ORDER IN FORM GST DRC-07 DATED 15.12.2023 BEARING REFERENCE NO. ZD291223042864A (ANNEXURE -D1). IV) ISSUE A WRIT OF CERTIORARI QUASHING THE ORDER IN APPEAL DATED 30.08.2025 HC-KAR NC: 2026:KHC:35633 UNDER SECTION 107(11) OF THE CGST ACT, 2017 BEARING NO. MYS- ADC/JC(A)-187/2025-26-GST, FILE NO. A. NO 110/OCT/2023/BW/ADC/JC/GST AND DIN 20250857CV0000000B38 (ANNEXURE-G). V) ISSUE A WRIT OF CERTIORARI QUASHING THE RECTIFICATION ORDER DATED 13.05.2026 BEARING ORDER NO. MYS- ADC/JC(A)-062/2026-27-GST ISSUED BY THE RESPONDENT NO. 1 (ANNEXURE-J). VI) ALTERNATIVELY, REMAND THE MATTER BACK TO THE APPELLATE AUTHORITY/ RESPONDENT NO.1, DIRECTING THEM TO ADJUDICATE THE PROCEEDINGS AFRESH IN ACCORDANCE WITH LAW, AFTER TAKING INTO ACCOUNT AND GIVING CREDIT TO THE DIFFERENTIAL PRE-DEPOSIT OF RS. 1,800/- PAID BY THE PETITIONER VIDE FORM DRC-03 DATED 21.11.2023 (ANNEXURE F1) AND GRANTING THE PETITIONER A FAIR AND EFFECTIVE OPPORTUNITY TO BE HEARDVII) AND PASS SUCH OTHER ORDERS AS THIS HON'BLE COURT DEEMS FIT AND PROPER IN THE INTEREST OF JUSTICE AND EQUITY. HC-KAR NC: 2026:KHC:35633 THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner, while calling in question the Show Cause Notice dated 28.04.2023 [Annexure-B] and the Order-in-Original dated 17.07.2023 [Annexure-D] under Section 74 of the Central Goods and Services Tax Act/Karnataka Goods and Services Tax Act, 2017 [for short, ‘the Act’], has also called in question the Order-in-Appeal dated 30.08.2025 [Annexure-G].
Sri Joseph Varghese, the learned counsel for the petitioner, submits [a] that the petitioner's grievance insofar as the present petition would be redressed if the petitioner's grievance with the Order- in-Appeal is considered, [b] that the petitioner has filed the appeal within time and has also made the HC-KAR NC: 2026:KHC:35633 pre-deposit as required [c] that because of an inadvertent computational error there was a shortfall of Rs.1,800/- [d] that this is also remitted but beyond 120 days as contemplated under Section 107 of the Act [e] that the appellate Authority has found that the appeal cannot be entertained because the entire pre- deposit is not made within the period of 120 days. [f] that the petitioner is categorical in stating that the error in computing the pre-deposit is bonafide and upon realizing this error has offered the differential amount at the earliest.
Sri Aravind V Chavan, a learned standing counsel for the respondents, who is called upon to accept notice for the respondents, is heard on the interference with the appellate Authority’s Order-in- Appeal in these circumstances. The provisions of Section 107[6] of the Act reads as follows:
“107[6] No appeal shall be filed under sub- section (1), unless the appellant has paid- HC-KAR NC: 2026:KHC:35633 (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent of the remaining amount of tax in dispute arising from the said order, [subject to a maximum of twenty-five crore rupees,] in relation to which the appeal has been filed.”
The sub clause [b] of clause [6] of Section 107 of the Act begins with the expression “a sum equivalent to ten per cent of the remaining amount of tax in dispute excluding the amount contemplated in sub-clause [a] of Clause [6] of Section 107 of the Act. Indeed, an appellant must offer 10% of the remaining amount of tax in dispute [the pre-deposit], and the petitioner has offered this amount. However, initially the amount of pre-deposit is less by the sum of Rs.1,800/- and the petitioner has later, upon realizing this computational error, paid the remaining amount in the present form. HC-KAR NC: 2026:KHC:35633
This Court, in the peculiar circumstances of the case, opines that the appellate Authority has taken a pedantic approach in interpreting this clause and sub-clause [4] of Section 107 of the Act which stipulates that an appeal may be preferred within three months and with a further period of one month. The pedantic approach undermines the appellate remedy. Therefore, this Court is inclined to favour the petitioner on this limited ground to restore the appeal for a decision on merits. As such, the following: ORDER [A] The petition is allowed setting aside the Order-in-Appeal dated 30.08.2025 [Annexure-G] restoring the appeal for a decision on merits. Consequentially, the Rectification Order dated 13.05.2026 [Annexure-J] which is a reiteration of the Order in Appeal is also set aside. HC-KAR NC: 2026:KHC:35633 [B] The petitioner shall appear before the appellate Authority on 31.08.2026 without further notice. (B M SHYAM PRASAD) JUDGE
AN/-
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.